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Tata Steel Make New Strategies on European Unit due to High Losses

Tata steel in Eurpoe


Tata Steel’s board of directors will weigh strategic options for the company’s beleaguered European business at a meeting, said people in the know. The unit has run into rough weather due to diminished steel demand, oversupply in the European market and Tata Steel’s failed attempt to seal a JV deal with German conglomerate Thyssenkrupp.

Collab of Tata Steel with Europe


Tying up with a European peer is expected to help Tata Steel curtail losses at this unit. At present, the Indian steelmaker is in talks with Sweden’s SSAB, and if the deal materialises, it could take some weight off Tata Steel, which is facing a Rs 1.2-lakh-crore debt.


Gloomy Days of Tata Steel in Europe


Tata Steel has written down over 2-billion-pound losses on the European unit, which it acquired for 6.2 billion pounds in 2007. The business, formerly known as Corus and whose buyout was the largest overseas acquisition by an Indian company, has been more in the red than in black since the deal.


Tata Steel’s search for a solution to this business comes amid the European market’s attempts to adjust and restructure after the Coronavirus outbreak worsened the demand-supply imbalances. Among the renewed activities, Liberty Steel, owned by Ludhiana-born, British businessman Sanjeev Gupta, has made an offer to acquire Thyssenkrupp’s steel business, which is Europe’s second biggest in terms of sales.


In 2017, Thyssenkrupp had inked an agreement with Tata Steel to combine their European operations but the deal was blocked by the region’s anti-trust regulator last year on concerns that the joint venture would push prices up and reduce competition.



Source: https://timesofindia.indiatimes.com/business/india-business/tata-steel-board-to-take-call-on-euro-biz/articleshow/79181055.cms


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